The key Nikkei-225 average closed up 36.28 points at 18,439.36. The Topixindex of all first-section issues also gained, by 7.35 points to 1,702.58.Turnover on the major board totalled an estimated 523 million shares,against Monday's 584.9 million shares. Information-technology and bankingissues led the market advance, brokers said.

"The supply and demand situation and external factors were both favourable,"Daiwa Securities SB Capital Markets analyst Kazunori Jinnai said, citing theNasdaq's jump and the establishment of new investment trusts. The tech-heavyNasdaq surged 2.52 per cent in New York on Monday as Microsoft Corp sharesrebounded from a brutal selloff.

"But the market slowed down as dealers adjusted their positions ahead of theseries of holidays," said Jinnai. Nikko Securities market analyst HiroichiNishi said the Nikkei rose by some 200 points briefly "but failed to gainfurther ground amid caution in the middle of the holiday period."

Tokyo financial markets are closed from Wednesday to Friday for Japan's"Golden Week" spring holiday season. They reopen next Monday. But Daiwa'sJinnai said that investors would still be attentive to US economicindicators due out this week - the quarterly producers' index on Thursdayand April jobless data on Friday. They will also watch a US-Japan summit inWashington on Friday expected to focus on US demands for big cuts ininterconnection fees charged by Japan's Nippon Telegraph and Telephone Corp.(NTT), he said.